Editor’s note: Cyril Ebersweiler is the founder and Benjamin Joffe is general partner of the hardware startup accelerator HAXLR8R (“HAX”). Both have been living in China and Asia for over a decade. This is the fifth part of their series on “Lean Hardware.”

Some products like “slim wallets” can be successful servicing a small customer segment but are hardly startup material.

Campaigns Are Not Created Equal

Bad planning leads to bad surprises. Among the most successful projects, a good number raised venture capital prior to crowdfunding, often thanks to high-profile founders or strong technology. While it helps polish a campaign, this is no guarantee products will ship on time or at all. Creators experienced with manufacturing, or finding qualified support are essential to avoid shipping date slips.

As of September 2014, only 37 projects worldwide in the Technology and Design categories have reached the elusive $1 million mark on Kickstarter (less than 1 percent). Even $100k is not a walk in the park with a mere 13 percent.

Campaigns Don’t Run Themselves

Everyone should know by now, but it seems many still don’t realize that media and backers rarely stumble on your project the day you click “publish.” For many successful projects, the campaign started weeks before launch.

Once the campaign is live, there is much work to do to gather more backers. Quality updates can lead them to increase their pledges and attract more backers.

“Stretch goals are important but pitch a complete product. Core features in stretch goals might turn off backers. Plan your pledges and find the right service providers to avoid spending time on interactions for small pledges. I had “Buy me a Beer” for $5.”

It Might Not Ship

Only if creators figure out manufacturing! Many have zero experience. Spending just a few days in China for “parachute manufacturing” often fails. Yet, China is the Silicon Valley for Hardware and there is effectively a “cost of not being in China”: better plan for scale than shift plans later on. Shenzhen is also a great base for fast iterative prototyping.

Beyond manufacturing, some projects might simply be unrealistic, ship products that are late or compromised, or be downright scams. We call those NAIVEware, LATEware, LAMEware, SCAMware.

“Backers should research the backgrounds of creators and their teams. Do creators fully comprehend what they signed up for? There’s a stark difference between industry veterans and fresh grads, the latter being almost genetically incapable of due diligence.”

Creators Make Money

Projects Are Not All Original

The intention of crowdfunding platforms is to bring ideas to life, but some “creators” found that doing just the marketing on a product already developed by a third party could work too, such as those bamboo watches.

When taking a walk in trade shows in China, we often either recognize products, or end up thinking “this could totally be crowdfunded.” Will you recognize this one from the former-crowdfunding-turned-pre-order Chinese site Demohour? We bought it for $15 in Shenzhen a month ago.

Funded Does Not Mean Startup

Backers are mostly “Innovators” and “early adopters” (some have misplaced expectations since Kickstarter is not a Store and the recently revised Terms of Use make it clear). Can your product cross the chasm and achieve mass-market appeal? Do you have bigger plans? Are there barriers of entry? Otherwise success can mean being copied faster than you can spell “EASYware.”

Pure hardware is hard to protect: take it apart and it can often be reverse-engineered. These days, beyond designs and patents there is “defensible IP” in software, algorithms, or a community that a crowdfunding campaign can help you build!

“Most companies that launch a crowdfunding campaign don’t have a plan to go from a single product to a huge empire, and that keeps them from being VC investable startups.”

A Failed Funding Is Not the End

Just like a successful campaign can be a “false positive” for startup potential, failing a campaign can be a “false negative” and does not mean there is no hope there. Some companies rise again in spectacular “Phoenix Campaigns”.

Failing a first campaign has some advantages as it builds a list of backers and media you can reactivate for your second attempt. Yet, there are often multiple reasons why a campaign fails and figuring those out can be difficult.

In Conclusion

As it evolves, much is yet to be discovered about crowdfunding. Setting the right expectations and anticipating common problems can help all stakeholders (creators, backers, media and investors) reach their respective goals, and bring more ideas to life!

The authors would like to thank Bunnie Huang, Evegeny Lazarenko, Matthew Witheiler and Zach Suppala for their contributions to this article. Applications for HAX 6 are open until mid-November, with up to $100k in funding. The world’s first “inactivity tracker”DARMA targeting office workers is live on Kickstarter. It is a HAX 4 graduate and is already 400 percent funded.